Banks face $3b loss as oil firm goes under

Banks face $3b loss as oil firm goes under

Local banks are likely to suffer losses linked to the closure of Singapore petroleum company Coastal Oil Singapore, according to reports.

The closure of Coastal Oil Singapore may affect at least 10 banks in both Singapore and Hong Kong for a total of HK$3 billion.

A unit of Coastal Oil, Coastal Oil Singapore entered liquidation in December due to the sharp plunge in oil prices.

DBS Bank (Hong Kong) and Standard Chartered Hong Kong were among other lenders to the related companies, and the two banks have filed in the local high court for reclaiming the funds.

DBS Bank (Hong Kong) filed to reclaim US$30.07 million (HK$234 million) in loans and interest from Coastal Oil Singapore’s guarantors, including Coastal Oil (HK).Standard Chartered Hong Kong last month also requested the Coastal Oil Singapore’s guarantor to pay off US$15.73 million (HK$122 million) loans and related interests.

It is reported that 60 percent of the company’s loans were offered by Singapore’s banks.

Source: The Standard

Published: 03-01-2019